The President's New Executive Order on
Bio-based Products and Bioenergy
August 12, 1999

The Executive Order that President Clinton will issue today
will coordinate Federal efforts to accelerate the development of
21st century bio-based industries that use trees, crops, and
agricultural and forestry wastes to make fuels, chemicals, and
electricity. Owing to recent scientific advances, bioenergy
and bioproducts have enormous potential to create new economic
opportunities for rural America, enhance U.S. energy security,
and help meet environmental challenges like global warming. In a
separate Executive Memorandum, the President set a goal of tripling
U.S. use of bio-based products and bioenergy by 2010. Meeting this
goal could create $15 billion to $20 billion in new income for
farmers and rural America, and reduce annual greenhouse gas
emissions by an amount equal to over 100 million metric tons of
carbon (MMTCE) - the equivalent of taking over 70 million cars off
the road.

BIOMASS

Biomass is trees, crops, and agricultural and forestry wastes
that can be used to make fuels, chemicals, and electricity. Biomass
is a clean, domestic, and renewable source of energy. It can be used
to fuel cars, power factories, and create a host of chemicals and
other everyday products.

EXECUTIVE ORDER

Recent scientific advances in farm, forestry, and other biological
sciences are making bioenergy and bioproducts more technically feasible
and more economically viable. Recent reports and studies - including
the just-released National Research Council report, "Biobased Industrial
Products" - have concluded that Federal support for research is
essential to realizing the economic and environmental potential of
bio-based industries. Today's Executive Order acts on this advice to
create a powerful new research management team to focus Federal efforts
with a goal of tripling U.S. use of bioenergy and bioproducts by 2010.
Energy from biomass sources currently accounts for about 3 percent
of the total U.S. energy supply - mostly from wood and wood waste.

This Executive Order :

Establishes a permanent council consisting of the Secretaries of
Energy and Agriculture, the Environmental Protection Agency
Administrator, and the Director of the National Science Foundation,
and other agency heads to develop a detailed research program
to be presented annually as part of the annual Federal budget.

Instructs the council to review major agency regulations,
incentives and programs to ensure that they are being used
effectively to promote the use of bioproducts and bioenergy.
The council's plan will be reviewed by an outside advisory group
with representatives from bio-based industries, farm and forestry
sectors, universities, and environmental groups.

Directs DOE and USDA to establish a National Biobased Products and
Bioenergy Coordination Office to manage the preparation of
interagency budgets and provide an easy point of entry for anyone
interested in Federal work in biobased products and bioenergy.

Today's Executive Order also builds on the Administration's record
of strong and consistent support for bio-based industries. This
includes the Administration's electricity restructuring bill introduced
earlier this year requiring that 7.5 percent of all U.S. electricity
come from renewable resources by 2010; Executive Order 13101, signed
in September 1998, instructing Federal agencies to make use of biobased
products; new proposed tax credits for bio-based electricity production;
and increased research funding for the Department of Energy (DOE),
the Department of Agriculture(USDA), and the National Science
Foundation.

In a separate Executive Memorandum, the President instructed the
Secretaries of Energy and Agriculture to prepare a report within 120
days outlining and assessing options for modifying existing DOE and USDA
programs with a goal of tripling U.S. use of bio-based products and
bioenergy by 2010.

WHAT IS BEING DONE RIGHT NOW IN BIOENERGY AND BIOPRODUCTS

Clean bioenergy and bioproducts are very much here and now.
Already DOE and USDA are participating in partnerships on a number
of major, breakthrough bioenergy and bioproducts projects, including:

Biomass to Ethanol Demonstration Projects. Last fall BC
International broke ground in Jennings, Louisiana on the first
commercial plant to produce ethanol from the cellulose in
agricultural waste - in this case sugar cane bagasse. A
number of other demonstration projects are under development
to convert municipal solid waste to ethanol.

Biorefinery for Chemicals. Cargill Corporation, one of the largest
privately held company in the United States, has built a
prototype biorefinery in Blair, Nebraska. This new facility
will use corn to produce a stream of chemical products and also
a biodegradable polymer, polylactic acid, used in making films,
fibers, rigid materials and coatings.

Co-Firing Technologies. A number of projects are exploring ways to
use biomass such as switchgrass and short-rotation wood crops like
willows to make electricity by cofiring them with coal. Two of
the most prominent projects - the Iowa Chariton Valley project and
the New York Salix project - will also investigate the technical
and business aspects of biomass gasification, where biomass is
made into a fuel gas that can be used for heat or power production.

ECONOMIC POTENTIAL OF USING BIOMASS FOR ENERGY AND PRODUCTS

A robust bioenergy and bioproducts industry in the United States
promises tremendous economic benefits for biomass producers - including
farmers and the forest products industry - energy producers,
chemical manufacturers, and the U.S. economy as a whole.

For rural America, a fast-growing bioenergy market will greatly
increase the demand for energy crops and for agricultural and forest
residues, or wastes, of all types. Since the cost of transporting
the raw materials is high, most of the value-added work would occur
in rural communities, providing new revenue streams for farmers and
cash-flow for rural economic development. This means that good,
high-technology jobs associated with producing biofuels and chemicals
can be added in rural communities helping ensure that they will be
an integral part of a prosperous 21st century American economy.
By creating high-tech jobs and new economic opportunities, meeting
the President's goal of tripling U.S. use of bioenergy and bioproducts
could add $15 billion to $20 billion in new income for farmers and
many rural communities.

Finally, as the President's Committee of Advisors on Science and
Technology highlight in their new report - "Powerful Partnerships:
The Federal Role in International Cooperation on Energy Innovation" -
investments in bioenergy technologies, infrastructures, and markets
could increase profitability for U.S. firms competing in global markets,
while simultaneously providing for the world's future energy needs
in an environmentally sustainable way.

BIO-BASED TECHNOLOGIES HELP MEET ENVIRONMENTAL CHALLENGES

Substituting biomass for fossil fuels can dramatically reduce
greenhouse gas emissions that contribute to global warming. Since
biomass crops absorb carbon during growth, their use for energy and
other applications results in near zero net carbon release.

Meeting the President's goal of tripling our use of bioenergy and
bioproducts by 2010 will reduce greenhouse gas emissions by 100 MMCTE -
the equivalent of taking more than 70 million cars off the road.
Substituting for fossil fuels, bioenergy will also reduce emissions
of nitrogen oxides (NOx), sulfur oxides (SOx), and other pollutants.

Additionally, the deep-rooted plants commonly used for biomass -
such as poplar, willow, and switch grass - are helpful in controlling
erosion, filtering chemicals from water runoff, and slowing floodwaters.

PRESIDENT CLINTON'S FY2000 BUDGET ON BIOMASS

The President's FY 2000 budget request contains $242 million for
investments in biomass research, development and deployment, including:

Advanced Biomass Power and Fuels. Funding for DOE and USDA to
continue developing, testing, and demonstrating high-yield, low-cost
biomass feedstocks; cofiring biomass with coal to produce electricity;
advanced technologies for biomass gasification using paper industry
by-products; and continued work on producing alternative fuels, such as
ethanol, from biomass.

National Biomass Partnership. Funding for DOE, USDA and other
Federal agencies and private partners to launch a national partnership
to develop advanced integrated biomass technologies.

The President has also proposed a package of biomass tax credits.
The President proposes to extend for 5 years the current 1.5 cent
per kilowatt hour tax credit for electricity produced from biomass.
The proposal also expands the types of biomass eligible for the credit
to include certain forest-related, agricultural and other resources.
Finally, the package includes a 1.0 cent per kilowatt hour tax credit
for electricity produced by cofiring biomass in coal plants.

To date, Congress has not only failed to enact these proposed
new tax credits, but has terminated the current 1.5 cent per kilowatt
credit and cut the President's budget request by 14 percent.